A Trader's Confession: How I Adopted Soros's Strategies to Achieve 100% Returns

The essence of speculation lies in two points: how much profit there is when correct, and how much loss there is when wrong. Every investor has looked back on those trades that could have been hugely successful, regretting their light positions; similarly, they will reflect on those hesitant trades, questioning why they continued to double down on losing positions.

Position management is one of the most challenging yet leveraged skills to master. Top traders are constantly exploring ways to enhance this ability, as a misjudgment can lead to disastrous consequences. Although I have many shortcomings in execution, position management is one of the most successful areas of my career, compensating for many mistakes I have made in other aspects.

One of my favorite stories is about Stanley Druckenmiller and George Soros's experience of "decisively doubling down on asymmetric opportunities"; they are both exceptional fund managers.

In 1992, Druckenmiller served as the chief portfolio manager at Soros's Quantum Fund. He noticed that the Bank of England was artificially propping up the pound and was convinced that this support would be difficult to maintain in the long term. He expressed his views to Soros.

Druckenmiller proposed to bet 100% of the fund's capital on shorting the pound. Soros believed this approach was too conservative and suggested investing 200% of the capital in this trade, as such an opportunity arises only once every 20 years.

In the end, Druckenmiller executed the trade with a double position, which later became one of the most famous trades in history, earning a profit of $1 billion in a single day. As a result, Soros earned the title of "the man who broke the Bank of England."

The most successful trade I have made to date occurred in November 2024, when certain trading platforms announced the launch of $PEPE. While executing the trade, I kept thinking about the legendary stories of Soros, pondering how he would operate in such a situation.

That early morning, I checked the group chat messages, paid attention to Twitter updates, and observed the charts as usual. At that time, I had already taken a small long position in $PEPE, but the position had significantly lost value, making me somewhat anxious.

Suddenly, I saw a huge green candlestick rising from the ground, and I instantly broke even. Then I received the news: $PEPE was listed on a certain trading platform. After multiple confirmations, I realized this could be a once-in-a-lifetime opportunity.

The price of $PEPE skyrocketed from $0.000012 to $0.000016 in an instant. This news is significant because no other memecoins have been launched on the platform since $DOGE and $SHIB. Moreover, there were previously no convenient purchasing channels for $PEPE in the United States. This listing has opened the floodgates of retail funds for $PEPE.

At that time, the historical highest price of $PEPE was $0.000017. One of my favorite trading strategies is to break through historical highs, and I realized that those who sold at this price might not fully understand the importance of this news.

I bought 5 times the amount of my current position at market price, using almost 2 times the leverage of my entire investment portfolio to go long. Watching the dollar value on the trading app, I felt a wave of nausea in my stomach. Although I never intended to invest so much in a meme coin, I felt unusually calm inside because I firmly believe this is the right choice.

About an hour after the first listing announcement, another well-known trading platform also announced the listing of $PEPE, with the price breaking historical highs. Later that day, a third trading platform listed $PEPE, pushing the price to $0.0000255. I didn't even dare to check the trading app because the fluctuations in profit and loss were too great, which could affect my judgment. In less than 12 hours, my profits reached about 100%. Although I didn't close at the peak, I still locked in considerable gains, surpassing the total profits of the past few months.

However, when discussing the success stories of heavy investments, we cannot overlook their potential risks. Behind every large-scale concentrated bet that succeeds, there are countless cases of individuals who took a gamble and ultimately went bankrupt. This is precisely why correct investing is so challenging: finding a balance between having faith in one's theory and making bold bets while respecting the market is not an easy task.

Sometimes you are full of confidence and heavily invested, but after several days of losses, you decide to cut your losses. To your surprise, as soon as you close your position, the market immediately reverses and the price moves exactly as you expected. Yet sometimes you choose to hold on, only to wake up a week later to find your portfolio down by 50%. There is no doubt that this is a skill that is difficult to master.

I have personally experienced many cases of heavy losses, but one thing has always supported me: strict risk management. If the price movement does not align with my theory and losses persist for a period of time, I will decisively cut my losses. No matter how convinced I am, the market is always right.

Never dwell on losing trades; better opportunities are always waiting for you around the next corner. While there will always be worthwhile opportunities and ideas to invest heavily in, if I lose most of my portfolio, there won't be enough capital to seize the best chances.

Avoiding significant losses is the most critical concept in any risk game. The definition of "significant loss" varies from person to person. When I was building smaller portfolios early on, I had to take on greater risks. I often bet 10-15% of my portfolio on highly confident trades, as that was the nature of the market I was in. As my portfolio size grew and the liquidity of the markets I entered improved slightly, my risk tolerance correspondingly decreased. It is crucial to clarify your risk tolerance so that you clearly know how much loss you can bear with each trade.

This is why one of my favorite trading strategies is breakout. I prefer top breakouts because it is a clearly defined risk trade, either profitable or quickly invalidated. For example, the timing I chose in the $PEPE trade was when the price hovered at the peak and failed to break through, or when it broke through and then fell back below the historical high. In both scenarios, I have clear exit points, so it makes sense to build a large position at this level.

Looking back at my trading career, all significant growth in my portfolio has come from "all-in" returns. Each year, only a few trades generate most of the profits. Besides that, it's more like a survival game. You have to stay sharp enough to identify those trades that can bring huge returns, but also be disciplined to avoid losing all your chips on ideas lacking confidence and to refrain from doubling down on losing positions.

In my future career development, one area I plan to focus on improving is my holding capacity. I excel at making heavy bets, but I am not very good at maintaining positions in the face of significant unrealized profits. This stems from my inner risk management awareness, but if I can apply my theories more persistently instead of frequently making trades, I believe I can achieve greater success.